Question: 1
TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers' specific requirements. The standard cost per unit of its most popular cake is as follows:
The general market prices at the time of purchase for Ingredient A and Ingredient B were $23 per kg and $20 per kg respectively. TP operates a JIT purchasing system for ingredients and a JIT production system; therefore, there was no inventory during the period.
What was the material price planning variance for ingredient B?
Question: 2
TP makes wedding cakes that are sold to specialist retail outlets which decorate the cakes according to the customers' specific requirements. The standard cost per unit of its most popular cake is as follows:
The general market prices at the time of purchase for Ingredient A and Ingredient B were $23 per kg and $20 per kg respectively. TP operates a JIT purchasing system for ingredients and a JIT production system; therefore, there was no inventory during the period.
What was the material price planning variance for ingredient B?
Question: 3
A snowboard manufacturer is considering investing in technology that will give a good indication of how heavy snowfall will be in the future. The predictions tend to be reasonably accurate.
The current budgeted profit for the year is 2,560,000 but if they invest in this technology and it works, the expected profit will be 2,640,000. The manufacturer is willing to invest a maximum of 40,000 into the venture.
What is the expected profit if the investment is NOT made?
Question: 4
A company is considering two mutually exclusive projects.
The returns on each project, at both high and low demand, have been multipled by the estimated probabilities to calculate the expected values shown in the table below:
Market research would be able to determine with certainty what the level of demand will be.
What is the maximum amount that the company should pay for this certainty?
Question: 5
A manager has not yet used all oh his budget. He is worried that his budget maybe reduced next year if he is not seen to have needed all the funds. He decides to spend the remaining 1,580 on another team building exercise as well as a catered lunch for his department.
This example falls under which behavioural aspect of budgetary control?
